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How to Pick the Best Crowdfunding Platform

Heather R. Huhman is the founder and president of Come Recommended, a content marketing and digital PR consultancy for organizations with products that target job seekers and/or employers. You can connect with Heather and Come Recommended on Twitter and Facebook.

The recent JOBS Act has made it easier for small businesses to use the Internet to raise investments from family, friends, the community, and even complete strangers interested in their venture. The process, affectionately known as crowdfunding, helped raise $1.2 billion globally last year and the number is expected to double in 2012.

Variations of this phenomenon are flooding the internet, with new platforms being created and launched every day. As crowdfunding platforms become more prevalent, more niches are being defined. Whether you are a tech-savvy entrepreneur or a food connoisseur, there is a perfect crowdfunding website to gather support and fuel your new business.

Below are six online crowdfunding platforms, each targeting different users in specific industries.

1. Rock the Post

Summary:Rock The Post is a business social network and crowdfunding platform for entrepreneurs looking to jump-start their start-up or small business by building a strong following and gathering funding. Entrepreneurs can post about their venture or idea and spread the word in an open forum to engage with like-minded individuals. Contributions can come in the form of pledges and/or investments.

Best Feature: The in-depth category list allows you to post your business idea specific to its industry. There are currently 36 different categories, many of which cannot be found on other crowdfunding platforms. The unique categories range from home and garden to real estate. By specifying your niche on Rock The Post, your chances of connecting will be maximized.

What To Consider: Although the site encourages collaboration and feedback on the open forum, posts require a detailed campaign with no holes or gaps, as well as a video pitch.

Ideal User: Small businesses and entrepreneurs looking to jump-start their startup by gaining the support and feedback of like-minded individuals will benefit greatly from this open-forum platform.

Cost: There is no cost for standard services.

2. Razoo

Summary:Razoo has helped nearly one million officially registered nonprofit organizations to crowdfund. The site allows nonprofits to accept donations on their own website or on their Facebook page. Fundraising causes are organized into categories like animals, arts, cancer, disaster relief, environmental, and more. Charities can also post their fundraising events, including memorials and walkathons.

Best Feature: Razoo allows charities to create a profile for their cause, complete with video and photos. The site offers detailed examples of fundraising ideas for nonprofits to get started, and hosts "giving days," which are 24-hour online fundraising competitions. The site also offers an iPhone app and donation widget for the organization’s website or Facebook page, which makes receiving and tracking donations a breeze. Tech-savvy individuals will like Razoo's iPhone app, which allows users to receive notifications when someone donates, and includes an option to thank each donor individually.

What To Consider: You must be an officially recognized nonprofit to use this service. Razoo includes a list of approved charities, but if yours isn’t on the list, you can email your letter of determination from the IRS directly to Razoo so they can include it. You can learn more about this here.

Ideal User: Razoo is a good choice for nonprofits looking for an easy way to manage and encourage donations via web and social media.

Cost: The site charges a flat rate of 2.9% on all donations to cover credit card processing costs. Users can set up a fundraiser for any charity with no setup fees or monthly subscription fees.

3. Pozible

Summary:Pozible is a crowdfunding platform for creative-minded individuals looking to raise funds, realize their aspirations, and make great ideas become a reality. Project creators are able to present their visions to a worldwide audience, as the platform recently went global.

Best Feature: Unlike some of the other crowdfunding platforms, Pozible offers a variety of resources to help their users succeed. The Pozible Handbook provided by the team includes guidelines for before you start, how to set up your campaign, what to do during your campaign, and where to go after your campaign. Furthermore, the site provides a helpful blog with crowdfunding tips as well as an advice section from previous crowdfunders.

What To Consider: Pozible has an “all or nothing” approach. Each project owner is forced to set a funding goal and time limit (from 1-90 days) for their idea. If you are unsuccessful in raising your goal during the set time period, all pledges are canceled and the funds are not transferred. If you are able to estimate your projected funding, then this will not be an issue, but the race against time could deter you from your ultimate goal.

Cost: There is a standard service fee of 5% as of June 6, 2012. Fees only apply to successful projects.

4. FundaGeek

Summary:FundaGeek is a crowdfunding platform focusing on technical innovation, such as commercial projects based on technology, scientific research projects at universities and research institutions, education, and more. The site focuses on seven to 90-day commercial technology or tech research projects.

Best Feature: When users submit a project, it undergoes a review to ensure it's creative, unique, and appealing to a variety of people. FundaGeek also allows the user to make a project private so donors have to log in to see the full project details.

What To Consider: The site can be a bit difficult to browse and could use a categorical feature for searching for projects. Also, because FundaGeek screens projects before adding them to the site, not every interested patron has the chance to use its services.

Ideal User: Individuals looking to fund research or projects in the technology and science sector will find FundaGeek to be a good option.

Cost: There is no charge to create a project on FundaGeek, but if a project is successfully funded, the site charges 5 to 9% depending on which marketing option you choose.

5. Credibles

Summary:Credibles, a service offered by Slow Money, offers crowdfunding services to small, sustainable food-related businesses. The site offers a redemption service for prepaid crowd funding, donation tracking, and more.

Best Feature: When donors prepay their favorite business, they’re repaid with edible credits, or "Credibles,” which can be redeemed at the business. These credits, worth $1, serve as an incentive for fans and customers to participate. A customer who invested in a food-related business could, for instance, be paid back for their investment in ice cream. Credibles can be given as gifts and transferred for use at partnering businesses.

What To Consider: The service is currently limited to businesses in New York City and California, so businesses in other areas will have to wait before they’re able to use the service.

Ideal User: Credibles is ideal for professionals and business owners in the food and restaurant industry.

Cost: Credibles charges a small service fee when a supporter pays via the “pre-pay” option, though the site does not specify how much.

6. Petridish

Summary:Petridish is a crowdfunding platform for scientists to showcase their research to the public and for the public to show recognition and support to innovative researchers in the form of monetary payments or pledges.

Best Feature: Petridish provides you with the opportunity to gain support of the next, life-changing scientific discovery. Your “backers” have the ability to email your project to family and friends, share your research on Twitter and Facebook, and even ‘star’ your findings as a favorite. With these simple links, your research has the ability to be shared and spread across the Internet quickly.

What To Consider: Projects are hand-selected, thus not everyone has a chance of showcasing their research. Also, similar to Pozible, Petridish uses an “all or nothing” approach in which projects are only funded if they meet their goal by the set deadline.

Ideal User: Scientific experts looking to share their passions with others in order to accumulate backers and funding worldwide. Petridish is for the “best of the best” in science, as only some projects will make the cut.

Cost: The site requires a 5% fee. Third-party credit card processing fees are also the responsibility of the researcher, which are typically 3 to 4%.

Has your business ever used a crowdfunding service? How did it work for you? Share your thoughts below.

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